UPDATE:
The Chinese cruise vessel Henna has been released today Monday, Shagang Shipping said.
"As of this afternoon (Monday) funds ($2.7 million US dollars) promised by HNA Group arrived in Korea and the ship was released and sailed from Jeju in the Republic of Korea at 21:00hrs local time," the company said in a statement.
--
The arrest of the Chinese owned cruise liner Henna in Jeju in South Korea over the weekend arose from a dispute concerning the charter of a dry bulk carrier way back in 2008, said Shagang Shipping, the Hong Kong based company that sought the arrest.
A spokesman for Shagang said in a statement that this resulted as a consequence of failure by the HNA Group that owns Henna to comply with their contractual obligations, and to settle the $58 million plus which they owe to Shagang Shipping.
“The claims arise out of a long standing dispute between Shagang Shipping, and HNA Group Company Limited. These claims arise from 2008 when Shagang Shipping chartered a Capesize bulk carrier the Dong-A-Astrea, owned by Dong-A Tankers, to a HNA Group company, Grand China Shipping Company Limited, back in 2008 for a period of about seven years,” Shagang said in the statement.
“However, Grand China Shipping only paid hire in accordance with the terms of the contract for the first five months and then stopped paying,” it added.
“At the time the charter was agreed, HNA Group Company Limited provided a guarantee to Shagang Shipping in which they promised the faithful performance of the charter, and even agreed to stand in as the charterers if Grand China Shipping did not perform.”
“Despite many demands from Shagang Shipping, the HNA Group Company Limited have refused to honor their promises. This has meant that Shagang Shipping were not being paid $52,500 US dollars per day, whilst Grand China Shipping continued to trade the vessel at a huge expense to Shagang Shipping.”
“Over the course of about two years Shagang Shipping has won five arbitration awards for unpaid hire for more than 18 million US dollars but Grand China Shipping has still refused to honor those arbitration awards, until enforcement measures were taken against them .In the meantime the HNA Group Company Limited has simply ignored Shagang Shipping. In November 2012 Shagang Shipping were awarded damages of about $58 million dollars.”
“Due to their financial circumstances and failure to meet their debts to a number of creditors, Grand China Shipping were wound up by the Hong Kong Court in the spring of this year. Shagang Shipping are now pursuing HNA as HNA made a commitment to guarantee Grand China Shipping's performance of the charterparty.”
Shagang Shipping were completely satisfied that the arrest of the vessel in Korea had been in strict accord with Korean law. This type of arrest to obtain security for claims is common in most maritime jurisdictions including the US, UK and China, the spokesman said.
